THIS BLOG RATES THE S&P 500 BUY/SELL/OR HOLD EACH DAY WITH 2-GOALS FOR LONG TERM INVESTMENTS: (1) PRESERVE CAPITAL (2) BEAT THE S&P 500.
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“The Federal Reserve will likely bring its massive
bond-buying program to an end in October, and only after that will it consider
when to raise U.S. interest rates, a top Fed official said on Sunday. ‘I personally expect us to end that program in
October," Dallas Federal Reserve Bank President Richard Fisher said in an
interview on Fox News. "Then we have to see how the economy is doing,
including these broader measures of unemployment and where we stand before we
can talk about how we might move the short-term rate.’" Story at…

http://www.cnbc.com/id/101640080Even “considering” a rate raise in October will be too early for the
Markets.THE END IS NEAR (Hussman Funds)"Taking the broad stock market as a whole, and considering
all stocks – not simply the largest of the large caps – investors are now making
the broadest and most leveraged bet on overvalued equities in U.S. history.
Conditions somehow do not feel so dangerous because profit margins are
cyclically extreme, but I suspect that this only means that investors will be
surprised by the depth of the markets losses, as they were in 2000-2002 and
2007-2009. The lessons on this really are
freely available all the way back to the South Sea Bubble. Meanwhile, with
Bernanke out, the Federal Reserve no longer appears inclined to pursue his
wildly experimental and financially distorting policies. That’s not a good mix
for speculators, and there may not be much time left until Judgment Day.” –
John Hussman, PhD.Excerpted from
Hussman Funds Weekly Market Commentary for 5 May 2014 at…http://www.hussmanfunds.com/wmc/wmc140505.htmMARKET REPORT

Monday, the S&P 500 was UP about 0.2% to 1885 (rounded).

VIX rose about 3% to 13.29. Values of VIX in the range of
12 to 13 have ocurred at short-term tops in 2013.The yield on the 10-year Treasury Note rose slightly to 2.61%
at the close.The Bond Ghouls are worried about the stock market.If the smart money is selling, some are
buying bonds.

SUGGESTIONS A DOWNTURN IS COMING

The slope of S&P 500 is relatively flat and this
pattern has persisted since 30 December.Going back to December of 2009 I have only seen one instance when the
S&P was moving upward at such a slow pace for this length of time and that
was from mid-May to Mid-September of 2013.That period was followed by about a 5% retreat to the lower trend line.I’m going to make this point until the S&P 500 breaks
thru the old highs: The S&P 500 has closed within about 1% of the all-time
high of 1891 27-times since 1 Jan 2014.It needs to punch higher or the
correction will be back.The prior high
was 1891 so, not yet.

The Relative Strength Indicator (RSI) remains “overbought”
Monday at 78.In simple language, RSI is
a technical indicator that shows the percentile of the size of up-moves
compared to the size of all moves (up and down) over a given period of time
usually 14-days.An RSI (SMA) of 78 (based
on the 14-day simple moving average) means that the up moves are in the 78th
percentile of all moves during the recent 14-day period and that is a strong
value signifying “overbought.”

I mentioned a few other “suggestions” in yesterday’s
blog-post.MARKET INTERNALS (NYSE DATA) The 10-day moving average of stocks advancing on the NYSE
declined to 54% at the close.(A number above
50% for the 10-day average is generally good news for the market.) New-highs
outpaced new-lows Monday.The spread
(new-highs minus new-lows) was +56.(It
was +112 Friday.) The 10-day moving average of change in the spread was minus-3.
In other words, over the last 10-days,
on average, the spread has DECREASED by 3 each day. The smoothed 10-dMA of
up-volume continued to decline today.Only
Breadth is positive.The internals remained
neutral on the market.

Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late.They are most useful when they diverge from
the Index.In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.NTSM

The NTSM analytical model for LONG-TERM MONEY remained
HOLD Monday.Sentiment climbed to 85%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds. This is a very high number and on a statistical basis Sentiment is negative.Price, VIX & Volume indicators are neutral.

MY INVESTED POSITION

I increased my stock allocation to 50% invested in stocks
on 26 March because of the NTSM indicators turned positive Monday (24 Mar) at
the close.50% in stocks is fully
invested for me, given my age (semi-retired) and the risk inherent in today’s
stock market. I am watching closely to see if it is time to reduce my long-term
stock holdings.

Followers

About Me

I am an engineer with a lifelong interest in "playing with numbers" so what could be more fun than trying to develop a system that beats the stock market? Well, lots of things, but I decided to do this anyway.
While I am not a finance-professional, or professional investor, I have developed some skills.
I competed in two CNBC Million Dollar Portfolio contests finishing in the top 4% in 2008 (34,320th of 800,000) and the top 0.1% (448th of 500,000) in 2009. More importantly, I managed to sell out of my retirement accounts at or near the top in 2000 and 2007 and bought close enough to the bottom that I didn’t lose too much sleep. (Even Bill Gates lost SOME sleep.)
I hope that my thoughts will help you achieve your investing goals. Please remember that my ideas are free and there may be times when my ideas are worth less than what you paid.